The cellular IoT market is about to hit a major inflection point. That’s not hyperbole — it’s the top-line finding of new Omdia research projecting 5.9 billion cellular IoT connections by 2035. For anyone watching connectivity, telecom, or device ecosystems, that number says one thing: the next decade of IoT is going to be bigger, more diversified, and far more 5G-driven than what we’ve seen so far.

One catalyst is already making headlines: 5G RedCap’s first real-world debut inside the latest Apple Watch lineup. And while that alone doesn’t move the global market, the signal it sends definitely does. When Apple adopts a technology, the industry tends to follow — modules, chipsets, operators, and OEMs move quickly to catch up. Omdia’s Senior IoT Analyst Alexander Thompson put it bluntly:

“The starting gun for RedCap adoption has officially fired.”

This new wave isn’t arriving all at once — instead, it’s forming around three connected growth engines: 5G RedCap, 5G Massive IoT, and 4G LTE Cat-1bis. Together, they’re shaping the next decade of how devices connect, communicate, and evolve.

Let’s break down what’s driving this shift — and what it means for the industries that will benefit the most.

Why 5G RedCap Matters More Than People Think

RedCap (Reduced Capability 5G) sits in an interesting space: not full-blown 5G with extreme requirements like uRLLC or eMBB, but not low-power narrowband IoT either. It’s the middle class of connectivity — powerful enough for wearables, smart industrial sensors, fleet devices, cameras, and mid-range enterprise hardware, but cost-effective and battery-friendly.

Omdia highlights that 2025 is the year RedCap begins to ramp, helped by the Apple Watch announcement, operator testing, and ecosystem readiness. But the real acceleration comes in 2026, when the first 5G eRedCap modules hit the market. These enhanced versions bring even better power consumption, lower complexity, and a price point that finally makes sense for scaled IoT deployments.

RedCap also solves a long-term problem that many enterprises have been trying to avoid: the looming phase-out of 4G networks after 2030. Businesses deploying hardware today want futureproofing — and RedCap gives them 10+ years of runway.

If you look at the pattern, it mirrors the slow-but-steady adoptiohttps://amzn.to/4oE7c31n of LTE-M and NB-IoT. Early hype, slow deployments, then mass rollout once module prices hit the right curve. RedCap is following that same path — just with 5G efficiency and global operator buy-in happening much faster.

The Rise of eRedCap in 2026

One of the strongest insights from Omdia’s report is the role of eRedCap — not just standard RedCap, but its enhanced, simplified variant. It’s expected to debut commercially in 2026, and its arrival could fundamentally shift mid-range IoT economics.

Why does this matter?

Because eRedCap removes some of the complexities that make traditional 5G too expensive for IoT devices. It’s purpose-built for:

• Wearables
• Smart city infrastructure
• Industrial equipment
• Security and monitoring devices
• Connected home appliances
• Medical and health IoT

It’s also the bridge for companies transitioning away from 4G Cat-1bis — another segment Omdia expects to remain important but increasingly transitional.

Automotive Is About to Dominate Cellular IoT

One of the most eye-catching forecasts in the study is the growth of automotive IoT. Today the automotive sector accounts for 500 million connections. By 2035, Omdia expects this to hit 1.2 billion, taking the category from 13% to 21% of all cellular IoT — essentially, one in five connections worldwide.

Asia & Oceania will be the engine of that growth, driven by:

• Government-led smart mobility programs
• Consumer demand for connected EVs
• The rise of Chinese and Korean automakers with built-in 5G
• Regulatory requirements for connected safety features

Andrew Brown, IoT Practice Lead at Omdia, points to the convergence of trends that make cellular connectivity non-negotiable: over-the-air updates, telematics, infotainment, vehicle-to-everything communication, and the overall shift to software-defined vehicles. Without cellular, none of this works at scale.

If you zoom out, this prediction aligns with other reputable industry sources. Ericsson Mobility Report data shows a similar trend trajectory, with connected cars becoming one of the fastest-growing IoT categories globally. GSMA Intelligence also flagged automotive as the “anchor vertical” for 5G IoT revenue growth.

In other words: Omdia isn’t making a niche prediction — it’s reinforcing what nearly every major telecom research body is forecasting.

The Broader Picture: How 4G Cat-1bis and Massive IoT Fit In

While RedCap captures the spotlight, the market isn’t moving to 5G overnight. Two other technology tracks will remain part of the story:

4G LTE Cat-1bis
This has become the practical replacement for legacy 2G/3G modules, especially in logistics, POS terminals, asset trackers and low-cost industrial devices. It’s not going anywhere soon — but its peak has likely passed, and the move toward 5G mid-tier options will gradually chip away at its dominance.

5G Massive IoT (NB-IoT and LTE-M over 5G Core)
Operators in Europe, Asia, and the Middle East are accelerating work on Massive IoT over 5G networks. Although this tends to fly under the radar, it remains crucial for smart meter deployments, agriculture sensors, utilities, parking systems, and environmental monitoring.

In short: 4G still matters, Massive IoT continues to grow, but the gravitational pull of 5G — particularly RedCap and eRedCap — is now shaping long-term strategy.

How These Trends Compare With Other Market Signals

Other major research firms are seeing similar movements:

• GSMA Intelligence notes that 5G IoT is entering its “commercial reality” phase, driven by declining module costs.
• Counterpoint Research highlights RedCap as the biggest future contributor to 5G IoT shipments starting around 2026.
• Ericsson projects that by 2030, cellular IoT will exceed 8 billion global connections — slightly higher than Omdia’s estimate but directionally aligned.

What sets Omdia’s forecast apart is the clarity around the role of eRedCap and the timeline for adoption — something few firms have publicly defined with this level of detail.

Conclusion: Why This Decade of IoT Will Be Different

What makes this next wave of cellular IoT so important isn’t just the numbers — it’s the structure of the ecosystem that’s forming around it.

Unlike previous generations, where one technology dominated, the coming decade will be shaped by a multi-tier connectivity stack:

• eRedCap powering mid-tier devices
• RedCap bridging the 4G-to-5G transition
• Massive IoT handling scale
• Cat-1bis sustaining legacy-compatible needs
• Full 5G NR supporting high-performance industrial and automotive applications

This layered landscape makes IoT more flexible than ever, and more accessible to industries that previously found 5G too complex or too expensive.

Apple’s adoption of RedCap is the spark, eRedCap will be the accelerant, and automotive will be the powerhouse that carries the sector into trillion-dollar territory.

If Omdia’s prediction of 5.9 billion connections by 2035 holds, we’re entering an IoT era defined not by hype but by real, tangible deployment at planetary scale — and this time, the ecosystem looks ready for it.